Analysing the commercial development of Australian rugby utilising financial reporting

Abstract

Prior to sport being considered as a spectacle for paying consumers it was primarily regarded as a form of recreation and physical activity. The past half century, however, has seen a transformation of many sports and their governing organisations from 'kitchen table' operations to sophisticated commercial organisations (Stewart et al., 2004). This has seen the financial significance of the sport industry grow dramatically over the past 50 years. In an Australian context, sport was estimated to produce an annual economic impact of $50 US billion across events, trade, tourism and foreign affairs (Boston Consulting Group, 2017).Most recently, the global sport industry was valued at $488.5 US billion in 2018, and was projected to reach a record $614.1 US billion by 2022: prior to the outbreak of the COVID-19 pandemic (also referred to as the novel Coronavirus).Commercialisation has caused a shift in the sport paradigm away from amateurism and voluntarism towards sport as a profession and thus an economic activity (Rowe, 1996;Rowe, 2009;Rowe, 2011). This transformation has seen traditional methods of sport funding, such as member contributions, give way to gate receipts and sponsorship, which themselves are now losing dominance to broadcast rights, and intellectual and digital property rights as key revenue drivers (Andreff and Staudohar, 2000). This has also seen a corresponding shift in the sophistication of fiscal management of sport organisations and their reporting as they attempt to legitimise their positioning (Irvine and Fortune, 2016). However, although the commercialisation and professionalisation of sport has seen it increasingly adopt general business pactices, sport has 'for many years, lagged behind the business sector from a financial management perspective' (Stewart, 2014, p. 95).